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Kerala Panchaayat versus Coca Cola

- A Bird's eye view of the battle

-- By Kanika Aggarwal

(This report is based on clippings available in the PUCL reference library.)

This is a report on people's fight against Coca-Cola's water-guzzling plant at Plachimada village in Palakkad district, Kerala. The State is a quintessence of civilian’s fight for their rights to vital resources like water. The people of Plachimada and some organisations in Kerala have been protesting since 2002 against the Coca Cola plant for causing rapid depletion of groundwater in the surrounding areas and rendering the water in wells useless and harmful for drinking, washing, cooking, and other purposes in a radius of one to two kms.

The Perumatty Panchaayat of the village therefore filed a case in Kerala High Court against it. As a result, the High Court ordered the plant to be closed on 9th March, 2004. Later, on 7th April, 2005 the High Court appointed an Expert Committee and lifted the closure order on the Company imposing certain conditions on working of the plant. These conditions were based on the report submitted by the Expert Committee and were related to the quantity of groundwater that the Company could extract without causing scarcity of water in the village. This judgment of the High Court of 7th April lifting the closure order was criticized by the Kerala government. The government decided to intervene in the matter and went in appeal to the Supreme Court contending that “the Court directive was violative of section 232 of the Kerala Panchayati Raj Act given the fact that the Company had not complied with the directives on pollution control issued by the Kerala State Pollution Control Board (PCB) and the Supreme Court’s Monitoring Committee” 1.

Though the Court had given permission to the Company to resume working, it could not restart its working as in the meanwhile the ‘consent to operate’ license had expired. The Company sent an application to PCB for the renewal of the license which was rejected. PCB on 1st July, 2005 in its notice to Coca Cola bottling plant declined to renew the license and stated that it was not satisfied with the details submitted along with the application to renew the license, to the board by the Company. Their main objection was the unexplained presence of heavy metals like Cadmium in the sludge generated by the Company and in the well-water in a colony. The order issued by PCB stated, “Cadmium was found in concentration in the range of 200 to 300 milligrams per kilogram in the sludge from your effluent treatment plant. The observed concentration is much above the tolerance/permissible limit for hazardous waste, which categorically establishes that Cadmium bearing raw material has been used in the production process or effluent treatment. Your application does not contain the source of Cadmium and is therefore incomplete”. 2

Prior to this the Kerala High Court by its order dated 1st June, 2005 had asked the Panchaayat to renew the license. The Court also ordered that in case a formal license was not issued by the Panchaayat within a week, it would be assumed that the license had been renewed for a period of two years. Perumatty Panchaayat filed a Special Leave Petition (SLP) seeking to stay this order of the High Court. Coca Cola in its reply dated 12th July, 2005 to the PCB notice, denied the use of any Cadmium bearing raw material for production of its beverages. The Company submitted that the presence of traces of Cadmium in sample of sludge and groundwater did not mean that the Company used any Cadmium bearing raw material and that the sole purpose of PCB was to prejudice the interest of the Company by creating unlawful hurdles. PCB earlier had blamed Coca Cola for acting in variance with the instructions of Monitoring Committee, which was appointed by the Supreme Court and according to which the Company should have installed a “reverse osmosis system” for treating the effluent so as to prevent groundwater contamination. Referring to this point Coca Cola replied that there was no such provision of the Monitoring Committee. On 19thAugust, 2005 PCB asked Coca Cola Company to close down its plant at Plachimada immediately on the grounds that it had failed to meet pollution norms and the report submitted by Coca Cola regarding Cadmium level in the waste generated by the plant was insufficient. In spite of this, the Kerala High Court allowed Coca Cola Company to draw five lakh litres of groundwater.

This order was challenged by Kerala government, who filed an SLP in the Supreme Court on 14th September, 2005. The State government said that it was a case of infringement of right of villagers to use water required for their livelihood. “The ‘cause and effect’ relationship between Coca Cola drawing underground water and the level of water table in the area had been established through various surveys” 3.

This SLP submitted the contentions that:

The poor villagers could not afford to buy bottled drinking water to quench their thirst while the water that belonged to the community was being used by the Company to manufacture products for export.

The High Court should have acknowledged the right of villagers over the ground water when it was stated that excessive withdrawal for business of the Company would cause paucity of water in the area.

Allowing Company to carry on with its processes would result in injury to surrounding places and could lead to a chaotic situation.

On this SLP the Supreme Court issued notice to the Coca Cola Company. The High Court again on 16th November, 2005 ordered Panchaayat to issue a license for drawing water before 6th January, 2006, if the Company applied for a fresh license. Now the Panchaayat filed an SLP in the Supreme Court against this judgment of the High Court; as a result notice was issued to the Coca Cola by the Supreme Court. The counsel, Raj Kumar representing the Panchaayat, submitted that the High Court did not consider the earlier notices of the Panchaayat while giving this verdict and thus pleaded for the stay of the impugned order.

While the Senior Counsel C S Vaidyanath, representing the Cola Company contended that all the allegation made by the government and the people of the village were baseless and reckless. Finally on 4th January, 2006 to comply with the High Court’s order, a fresh license was issued to the Hindustan Coca-Cola Beverages Limited (HCBL) for three months along with 17 conditions imposed on the license by the Board.

The first condition was that the company could not extract water from the Perumatty Panchaayat limits. Other conditions included the disclosure of the contents of the drink made in the plant, explanation for the findings of dangerous materials such as Cadmium in the drink, etc. This issue has many aspects and the problem is not limited to just banning the plant in Palakkad. There are 500 old workers of the Company, who are worried about their jobs. They want government to rehabilitate them and provide them with some other work so that they can earn their livelihood. Also another battle for relief is also all set to start. People want the Company to pay for the damages suffered by them.

Two years after the Kerala government shut down the Hindustan Coca Cola plant at Plachimada, i.e., in 2006 a new controversy arose. The Hazard Center and the People’s Science Institute are two NGOs4, which stated the underground water within the radius of one km of the plant was found contaminated. The main cause of contamination they said was unscientific disposal of water of the Coca Cola unit.

This had caused increase in Arsenic content in the blood of those who had consumed this water. “As one moves towards the plant, contamination is higher indicating that its source is from plant itself”-said Ayan Biswas, who conducted the study for the NGO. Also Centre for Science and Environment (CSE), a Delhi based NGO, reported that the soft drinks manufactured by the two Companies, Coca Cola and Pepsi contained high level of pesticide. Keeping all this in mind Kerala Government on 9th August, 2006 announced a ban on the production and sale of soft drinks manufactured by Coke and Pepsi. Chief Minister V S Achuthanandan declared that the ban included cessation of production of coke in plants of Coca Cola and Pepsi along with the cessation of the sale of these products.

The Company in an appeal to the High Court said that the report of the NGO was not fully reliable and called the ban illegal. Judges of the High Court of Kerala were of the opinion that the result of the test of the Coca Cola could not be the sole basis of the ban. “The State government had banned colas under the Prevention of Food Adulteration Act, 1954. But the High Court said that only the Union government - not the State government - could use that Act to order a ban.” 5 The ban lasted for two weeks and was struck down on 22nd September by the Kerala High Court. Nevertheless the State government is determined and the Kerala Chief Minister has said that they would do all they can to impose the ban again.

This battle will determine the extent of community power and will also be a source of encouragement for those who are facing similar problems. Plachimada will achieve its success in true sense only if people learn to fight for their rights from this incident.